TeleGeography update: international carriers' traffic grows despite Skype popularity

Will computer-based voice communications services like Skype eliminate the need for international carriers? Not anytime soon, according to data presented in the newly released TeleGeography Report and Database.

Computer-based Voice over IP (VoIP) is nothing new, but Skype is the first such service to break into the mainstream, attracting millions of users worldwide. Skype had a million simultaneous users within six months of the release of its first version for Windows in July 2004. By the end of the third quarter of 2006, it had 136 million registered users, and the number of users online now regularly exceeds eight million. These users generated about 6.6 billion minutes of traffic in the third quarter of 2006, and are on track to make over 27 billion minutes of PC-to-PC calls this year. About half of Skype's traffic is international.

This has prompted worries that Skype - and similar services - could undermine the viability of the international long-distance market. However, while the volume of international traffic routed via Skype is significant, the quantity is still small when compared to a global switched and VoIP traffic base of 264 billion minutes. Computer-to-computer traffic between Skype users in 2005 was equivalent to 2.9% of international carrier traffic in 2005 and approximately 4.4% of total international traffic in 2006. Furthermore, not all of Skype’s traffic is a net loss for international carriers. Skype also offers a paid 'Skype Out' service, which allows Skype users to place calls to traditional telephones. The service relies on wholesale international carriers, including iBasis, Cable & Wireless, and Level 3, to terminate this traffic to the telephone network.

Still, it’s clear that VoIP services will continue to gain in popularity. 'Someday, all calls will be routed over the Internet,' commented Stephan Beckert, Research Director at TeleGeography. 'But the numbers suggest that traditional international carriers aren’t going to disappear anytime soon.'

Updated continually since 1989, TeleGeography Report and Database has become the benchmark report for the international carrier industry. To learn more about the enhanced 2007 version, available now, please visit our web site or contact your account manager today: www.telegeography.com/products/tg/index.php

Source: TeleGeography Report and Database